Getting a first purchase from a customer is always satisfying. New data shows, however, just how hard it is to build repeat customers, those that buy over and over again.
I’ve just completed one of the most extensive studies ever conducted into the purchasing behavior of website visitors. I analyzed the behavior of more than 600,000 people and a quarter of a million online transactions to understand (a) what people actually do when they buy, (b) their behavior when they abandon, and (c) what it takes to win repeat business.
What emerged gives a fascinating glimpse into how customers buy. For example, the data shows that the majority of visitors will abandon before making a purchase — on average there are 1.3 abandons for every sale.
Conventional wisdom suggests that website conversion is good, and abandonment is bad. Yet, this research shows that not all shopping cart abandonment is bad. In fact, shopping cart abandonment is an important part of the normal buying cycle for many customers, and for many types of purchase.
Getting that first purchase, however, is difficult.
New Customers; Repeat Customers
The probability of getting a new visitor to buy on the first visit is miniscule — less than 1 percent. There are always exceptions to this. For example, sites that sell specific had-to-find items such as spare parts get much higher first-time visitor conversion, but they are unlikely to build a regular revenue stream from this business.
Only 5 percent of new customers that make a purchase will return to the site, and only 3 percent will make a second purchase. Since repeat customers are a key to profitability, this is an alarming statistic. We also know that when new buyers return, they are much more likely to abandon—with a 64 percent higher than normal abandonment rate.
Remarketing emails are normally reserved for customers that don’t buy, in the form of shopping cart recovery emails. What this data shows is that remarketing can be an effective technique for new customers as well. Customers that have made a recent purchase are more than twice as likely to come back and buy when sent remarketing emails — 57 percent will come back and buy compared with 21 percent for all abandoners.
3 Remarketing Email Programs
While new customers are more likely to abandon, they are also more likely to return when sent remarketing emails. Here are three key email programs that all merchants can use to drive repeat sales.
Purchase confirmation email. If you haven’t already optimized your purchase confirmation email, this is the place to start. Dust off that impersonal system-generated email and give it a new lease on life. These emails get very high open rates and can be incredibly effective in getting visitors back to the site for cross sell. Remember that while your goal may be to drive return visits to the site, it is important that the customer perceives this email as "great service," not an aggressive sales approach. Top items to include are:
- Hyperlinks back to view their order;
- Support email addresses and contact phone numbers;
- Recommendations of complementary products;
- Best selling products in the category or for the site.
These may require you to consider using your email service provider for transaction confirmations because this will give you full control of the email content and make it much easier to update. This is also the easiest way to include recommendations in your emails, since most ESPs have partnerships with the major recommendation engines. If you don’t have a recommendation engine, then you can still use these emails for simple cross-selling by having fixed recommendations based on your top sellers. Some ESPs charge extra for real-time transactional send access, so make sure that when you are renegotiating your contract you get this included.
Post-purchase remarketing emails. Your newly redesigned purchase confirmation will drive visitors back to the site. But as we know from the data above, purchasing doubles the likelihood of abandonment. The next step in your strategy to drive repeat purchases should be to look at post-purchase remarketing to reconnect with your new customers when they abandon. If you don’t already send remarketing emails, then this is a quick win that will drive incremental revenues. Top items to remember are the following.
- Remember remarketing is about delivering great service that drives up brand engagement and subsequent purchasing.
- Include the image, name and description of the product the consumer abandoned. This makes the email very relevant.
- Include a link back to the consumer's cart.
- Keep the messaging focused on the abandoned products; don’t distract the customer with cross-sell offers.
As with all remarketing, you need to take extreme care to stay in-synch with your customers. This is particularly important with an abandonment that follows a purchase because a significant number of customers come back just to check on their orders or to check the product details again. Getting out of step with what customers are doing will cause you numerous headaches and potentially damage your brand reputation. However, if you get it right you should see 57 percent coming back to purchase again.
Reactivation email campaign. Despite your new purchase confirmation, the majority of new customers will not return to the site. The most commonly used tactic is to automatically drop new customers into your house mailing campaign. While this is undoubtedly better than nothing, it will never perform as well as a more targeted reactivation campaign. A reactivation campaign should pick up from where your transaction confirmation left off with a sequence of focused emails. You need to track activity on the site and exclude any customers that return through the lift of your campaign. Here are top tips to remember.
- Keep the emails as relevant as you can, basing the content on their browsed and purchased items.
- Use recommendations and top selling items.
- Build in a "review your purchase" step or survey a minimum of two weeks after the first purchase.
- Keep focused on delivering great service.
- Use incentives to encourage a second purchase.
While these email campaigns may appear to be a lot of effort, if you already have a good email service provider they should not be difficult to set up. They are worth the effort. These emails are incredibly lucrative, usually becoming the highest grossing emails in terms of revenue per email as soon as they are launched.